Ziraat Participation managed to make a profit of TL 4 billion in 2023, when it maintained its strong financial and operational performance.

Ziraat Participation has determined its Strategic Roadmap for the period 2022-2025 as “Focused Growth”, “Sustainable Profitability”, “Competency Transformation”, “Exemplary Participation Banking”, and “Agriculture”.

Ziraat Participation provided products, services and diversity of channels which are in compliance with participation banking principles in order to meet the financial needs of its customers through the correct channel, at the right time and with the appropriate value proposition. The Bank continued to be the strong solution partner of its customers with a systematically increasing quality of service in corporate and retail banking business lines.

Ziraat Participation maintained its strong financial and operational performance in 2023, generating a profit of TL 4 billion.

Ziraat Participation is determined to continue to increase the support it provides in financing to the real sector and its contributions to economic growth in the future, in line with Turkey’s 2024 targets.

The Bank aims to expand and develop the interest-free finance system within the country and to represent our country abroad, with its branching efforts. In this direction, in 2023, it has opened up 34 new branches in the country, and one abroad.

RESOURCE AND CASH MANAGEMENT

Activities in 2023:

In 2023, Ziraat Participation expanded its insurance product range to include a variety of offerings such as İlk Ateş SME Insurance, Limit Protection Insurance, Corporate Package Insurance, Individual Assurance Insurance, Personal Accident Insurance, Entrepreneur Support Insurance, Farmer Support Insurance, Farmer Friendly Insurance, Agricultural Finance Life Insurance, and State Supported Receivable Insurance. These new products were thoroughly developed and have been made accessible to customers.

Ziraat Participation has completed the systemic integration for issuing TARSİM policies in 2023 and has commenced policy production.

Studies on product service innovations and integration

Ziraat Participation has completed the systemic integration for issuing TARSİM policies in 2023 and has commenced policy production. State Supported Agricultural Insurance contracts are issued on a participation basis through member insurance companies and/or agencies holding a participation insurance license, and all kinds of business and transactions related to state supported agricultural insurance policies issued on a participation basis are conducted in accordance with participation principles under the supervision of the Advisory Committee.

Ziraat Participation has conducted stock trading integration studies with the mentioned company in order to provide intermediary services for stock trading to its customers through Ziraat Yatırım in a structure that adheres to the participation principles, and the 1st phase of the project has been completed.

The Bank has signed protocols with numerous companies as part of the Direct Debiting System (DBS). In this particular setting, there has been a 50% increase in the number of parent companies compared to the preceding year. Additionally, the number of DBS dealers recorded a 45% surge.

The ZK SME Participation Digital Product was introduced to customers as part of the e-transformation initiative for SMEs. The advancements in the system are still in progress.

In 2023, Ziraat Participation signed a protocol agreement with MoneyGram. MoneyGram’s payment services are scheduled to be made accessible to the Bank’s customers by 2024.

Ongoing and Planned Activities in 2024:

Daily Account

It is planned to develop an account customized to meet the specific needs of both real and legal person customers. This account will provide customers with the convenience of accessing a portion of their balance in the Daily Valued Account with the current account feature for their daily needs, while also utilizing the remaining balance in buyback/sale commitment transactions of lease certificates.

Accumulating Savings Account

It is planned to develop a product that will allow Ziraat Participation customers to save their funds for a specific purpose during certain periods. The goal is to strengthen Ziraat Participation’s customer base by offering customized products such as Hajj Account, Umrah Account, Education Account, etc.

Ziraat Yatırım Stock Trading Integration

As part of the Ziraat Yatırım Stock Trading Integration, it is planned to conduct the 2nd phase studies in addition to the 1st phase studies completed in 2023 and make the relevant service module available to customers.

Supplier Financing

Continued progress is being made on the development of the Supplier Financing product, with plans to launch it in the first quarter of 2024.

In 2024, Ziraat Participation will continue to analyze its existing range of products to identify areas for improvement and take necessary actions accordingly.

FINANCING PRODUCTS MANAGEMENT

Added value generated through collaborations with KGF and KOSGEB

Within the framework of the protocol signed between the Kredi Garanti Fonu (KGF) and Ziraat Participation, businesses are still being provided with financing options through support packages aimed at mitigating the negative effects of the pandemic on businesses and funding their investments.

In order to provide financial support to businesses impacted by heavy rainfalls, floods, and landslides in Amasya, Kastamonu, Sinop, and Samsun provinces in 2023, the “Amasya, Kastamonu, Sinop, and Samsun Provinces Emergency Support Financing” product allocation is ongoing between KOSGEB and the Bank.

A protocol called “İstanbul Başakşehir Emergency Support Financing” was signed between KOSGEB and the Bank in order to provide financial assistance to businesses impacted by the floods in 2023 in the Başakşehir district of İstanbul province.

The allocation of the “Bursa İnegöl Emergency Support Financing” product between KOSGEB and the Bank is ongoing to provide financial assistance to the businesses impacted by the fire in İnegöl district of Bursa province.

In order to provide financial support to businesses impacted by heavy rainfall and storms in İstanbul (Şile and Ağva), Bursa (Gemlik), Diyarbakır (Bismil), Batman (Central), Zonguldak (Alaplı and Ereğli), and Düzce, the “İstanbul, Bursa, Düzce, Diyarbakır, Batman, and Zonguldak Provinces Emergency Support Financing” protocol was signed between KOSGEB and the Bank.

Wide range of products and services offered

With the goal of supporting the economy of the country, the “Vade-SİZ Export Credit” product was developed to provide both SMEs and non-SME businesses, who are members of exporters’ associations, with access to long-term financing at affordable profit share rates. A total of 48.7 million US dollars has been allocated in this context.

The Bank has initiated integration efforts for the “Mobile Letter of Guarantee” product as part of its digitalization goals. In line with the latest updates to the Takasbank infrastructure, this product provides legal person customers with a more convenient and efficient way to fulfill their letter of guarantee requirements.

The “Instant Financing” product has been expanded to the service sector, allowing retail customers to conveniently finance their desired purchases from businesses that have agreements with the Bank. This product is accessible through digital channels at any time of the day, eliminating the need to visit a branch. This product provides individual financing as part of an ijarah contract, specifically designed for purchases in the service sector, including education, hajj-umrah, and tourism.

Based on the cooperation agreement signed between Türkiye’nin Otomobili Girişim Grubu and the Bank, the “TOGG Vehicle Financing” product has been developed to cater to real persons who want to purchase the national automobile brand TOGG.

The TOGG vehicle financing product is available at Ziraat Participation branches, and TL 237 million was disbursed to 352 customers in 2023.

Systematic developments for TOGG Vehicle Financing to be carried out directly through the mobile application without the need to visit a branch have been completed and will be introduced alongside market expansion.

The implementation of the My First Home Housing Financing and Expanded Housing Financing products, which were introduced to enable customers to own a house with affordable financing conditions, and the My New House Housing Financing product, designed to make home ownership more accessible for customers in the middle income group, continues.

The Bank provides customers with the TLREFK Indexed Leasing option, which offers medium- and long-term leasing financing services that align with participation banking. The payment plan is designed with variable installments based on the Turkish lira Overnight Participation Reference Return Rate (TLREFK) index.

Ziraat Participation is committed to contributing to the development of agriculture in our country within the scope of a sustainable eco-system, promoting mechanization and modernization, and increasing the efficiency and production of agricultural products.

Sustainability-oriented products and initiatives

Ziraat Participation has introduced to its customers “Environmental Financing Products within the Scope of Sustainability”, designed by taking sustainability into consideration with the aim of financing the green transformation, which is of critical importance for the future of the planet and humanity, while also reducing the foreign reliance on energy resources of the country’s economy. The Bank’s goal is to expand and diversify the range of SDG-related products and services in the upcoming period, following the principles of participation banking.

Ziraat Participation provides sustainability-themed products to both its individual and commercial customers.

One of these products, Thermal Insulation Financing in Residences, has been designed by Ziraat Participation within the framework of its sustainability approach and offers real person customers the opportunity to finance their thermal insulation and roof insulation expenses under favorable conditions in order to improve energy efficiency and reduce heating costs in residential areas.

Ziraat Participation is committed to contributing to the development of agriculture in our country within the scope of a sustainable eco-system, promoting mechanization and modernization, and increasing the efficiency and production of agricultural products. In this context, the Agricultural Financing product was developed and made available to customers in order to support conscious, high-quality, and efficient agricultural production.

The Bank continues to work on new products in response to the ongoing climate crisis and its large-scale impacts, as well as the needs and preferences in food consumption and agricultural policies in the medium- and long-term.

Financing packages launched

As part of the protocol regarding equity guarantees signed between KFK and the Bank, the KFK-Equity Export Support Package sub-protocol was signed in order to support the access to financing of companies operating in the exporting or foreign exchange earning services sector. Ongoing preparations are being made for the utilization of the product.

Within the scope of the equity protocol signed between KFK and the Bank, studies are ongoing to develop the KFK-Financial Leasing Package for both SME and non-SME companies.

Studies are currently underway on Commercial Flexible Support Financing (TEDEF) products, which are being considered as a potential alternative to conventional banks’ revolving loan products in line with participation banking principles.

Another product currently being developed is Flexible-Payment Business Financing, which will allow companies to make profit payments in certain periods and make principal payments (without incurring any closing commission) on the desired date. It is intended to be used with contracts such as investment power of attorney and murabaha.

Efforts are underway to improve companies’ competitiveness during the pre-export phase and address their financial needs through Export Preparation Support Financing, which aims to cover expenses related to raw materials, finished products, semi-finished products, and other production costs for export customers.

Development studies are being conducted to facilitate collaboration with the dealers with whom Instant Financing product agreements are made on a Company Contribution basis. Similarly, preparations are ongoing for FC Housing Financing, which offers financing options in foreign currency (USD/EUR) for those who are not Turkish citizens interested in purchasing property in Turkey.

Studies are currently being conducted to develop the Current Account Discounted Financing product, which aims to provide legal/real person customers with the opportunity to secure financing at a favorable rate in exchange for temporarily blocking funds in their current account as collateral. 

Progress is being made on the MedCezir Account, designed to address the instant, daily, or up to 30-day maturity financing needs of legal person customers.

Development studies are being conducted to facilitate work with Dealer Contribution Fee with dealers with whom a Financial Leasing product agreement has been reached.

DIGITAL BANKING

Web, Katılım Mobile and Internet Branch

In 2023, the Somali corporate website became accessible to customers.

The device activation structure has been upgraded to facilitate faster login and transactions using the device identification method from Katılım Mobile. Additionally, a new structure has been implemented to allow customers to carry out their transactions with greater speed and security through Mobile and Internet Branch.

The new feature of Katılım Mobile, the Send Document function, which enables customers to conveniently submit missing or updated documents without the need to visit a branch, has been made available for use.

With the new TR ID card and face recognition technology, users can now conveniently carry out transactions such as Forgot My Password, Get Password, Sim Card Verification, and Mobile Phone Number Update using Katılım Mobile.

Enhancements have been made to the user interface and editing features of the Internet Branch. Additionally, informational boxes have been incorporated into Katılım Mobile as part of marketing initiatives.

In 2024,

Ziraat Participation aims to enrich Katılım Mobile and Internet Branch by introducing innovative solutions and enhancing the value proposition it offers to its customers in 2024. Within this framework,

• It is planned to provide intermediary services for Stock Trading on Katılım Mobile and Internet Branch.
• In addition to accepting individual applications through video calls from Katılım Mobile, it is aimed at providing remote application opportunities through video calls for all segments by receiving commercial customer applications from Katılım Mobile as well.
• The Bank will make front-end arrangements and infrastructure upgrades to enhance the internet/mobile banking user experience.
• Harmonization studies will be conducted for the criteria required for identity verification, transaction security in electronic banking services, and the establishment of contractual relationships in the electronic environment.
• Katılım Mobile and Internet Branch will enable customers to switch between their individual and corporate accounts.
• By opening the Digital Approval structure to corporate customers, it will be possible for Ziraat Participation corporate customers to give contract approvals remotely.
• Private Banking customers will be able to utilize the Katılım Mobile application featuring a customized theme.

ATM and Open Banking

Ziraat Participation has introduced a convenient feature that allows customers to conveniently monitor their accounts at the Bank through other banking applications, and transfer money from the relevant accounts.

In 2023, the ATM infrastructure of the Bank underwent a transition to the Ocean 2.0 structure, resulting in improved speed and efficiency of control. In addition, all Ziraat Participation ATMs have been integrated into the ATM network of various banks, including Ziraat Bank, Halkbank, VakıfBank, PTT, Vakıf Participation Bank, and Emlak Participation Bank. This has transformed them into “Türkiye’s ATM Center (TAM ATM)”, providing access to approximately 20,000 ATMs across the country.

In 2024,

• Customers will have access to the Authorized Payment Service function, enabling them to conveniently monitor and make transfers with other bank accounts through Katılım Mobile and Internet Branch.
• Ziraat Participation services will be provided as APIs to customers or fintechs who serve as interface providers.

The total number of customers of the Branch, which gained 12,340 new customers in 2023, increased by 18.38% compared to the end of 2022 and reached 79,471. 100% of the customers acquired in 2023 joined the portfolio through video calls.

Customer Contact Center

Development studies have been conducted to enhance the Arabic SMS and e-mail sending capabilities within the Contact Center’s SMS and e-mail infrastructure. Using this completely built module, it is now possible to send bulk SMS messages in Arabic.

A computational modeling study was conducted to facilitate the analysis of voice conversations between customers and the Ziraat Participation Call Center, specifically focusing on products and services. This analysis was made possible with the use of artificial intelligence.

Within the route notification management system, a structured interface has been developed to enable active and passive management of the main topic/subtopic, notification source, notification location, and notification type fields.

In 2024,

• It is planned to develop an automated calling system that will fully eliminate the external call operation, which takes an average of 3 minutes per call.
• Legal entity and sole proprietorship accounts will be opened through the remote identity verification method.
• Through the implementation of remote identity verification using video call technology, customers will have the capability to alter their transaction limits without the need to physically visit a branch location.
• It is aimed at establishing the infrastructure necessary for conducting satisfaction surveys on customer product and service usage.
• Efforts will be undertaken to devise techniques through which voice biometrics can be obtained and to use them as an alternate means of authentication in various channels.

Central Banking Branch

The Central Banking Branch of Ziraat Participation provides services in four different languages: Turkish, Arabic, English, and sign language.

The total number of customers of the Branch, which gained 12,340 new customers in 2023, increased by 18.38% compared to the end of 2022 and reached 79,471. 100% of the customers acquired in 2023 joined the portfolio through video calls.

The Central Banking Branch conducts sales and marketing activities through external calls.

In 2023, a total of 44,088 external calls were made. During the reporting period, total deposits increased by 36% compared to the end of 2022, reaching TL 921 million. Additionally, the number of Katılım Mobile users grew by 9% to 24,892, the number of credit cards increased by 42% to 1,895, and the number of invoice automatic payment orders rose by 37% to 3,192.

Out of the total of 64,244 voice calls received by the Central Banking Branch during the first three quarters of 2023, 94.02% were handled by customer representatives. The service level achieved during this period was 78.09%.

During the specified time frame, the Central Banking Branch received a total of 63,821 applications over video calls. Customer representatives handled 69% of these requests, converting 42,740 into video calls. Customers whose demands could not be met were contacted through external calls on the same day and provided with appropriate guidance.

RETAIL BANKING

Ziraat Participation has consistently supported SMEs, which form the basis of economic growth, with the perspective of “being their primary bank”.

Assistance provided to customers in earthquake zones

Following the devastating Kahramanmaraş earthquake disaster, which occurred on 6 February 2023 and was deemed the disaster of the century, Ziraat Participation promptly provided all kinds of support to its customers in the affected region and ensured that loan payments were postponed on a regional basis.

Throughout the year, the Bank provided financing and guarantee support packages to its SME customers, in collaboration with KFK, KGF, and KOSGEB. The earthquake-affected regions received priority.

Ziraat Participation broke new ground and introduced state-supported agricultural financing options for its producer customers in the agricultural sector.

A “first” in state-supported agricultural financing

Ziraat Participation has introduced state-supported agricultural financing options for its producer customers in the agricultural sector. The Bank is committed to providing comprehensive financial solutions to address all the needs of its producer customers through its range of agricultural products.

Ziraat Participation has been the first participation bank to implement state-supported agricultural financing, making it the second bank in the sector to do so after Ziraat Bank.

Increasing volume in financial leasing transactions

Retail Banking has accelerated its operations in the financial leasing segment, providing numerous benefits, including maturity, guarantee structure, VAT advantage, and payment options tailored to cash flow. During the reporting period, the Bank’s financial leasing transaction volume increased by 168% and reached TL 21.5 billion.

With this performance, Ziraat Participation has maintained its position as the leader in the participation finance sector, in financial leasing products.

In 2023, the focus was on enhancing products and services to attract more SME and individual customers, boosting their engagement and base penetration.

Providing support to producers and exporters

In 2023, Ziraat Participation further enhanced its support for the real sector, with a strong focus on production and exports.

Work on the first phase of the SME Value Proposition Project, which aims to address the 360-degree financial needs of SMEs through a comprehensive range of products and services, has been completed. In this context, various innovations have been introduced in Cash Transaction, Foreign Trade, Insurance and Energy consulting to facilitate customers’ financial transactions.

The KOBİ Katılım Dijital brand was established with the aim of providing customers with a convenient way to handle their ERP Solutions, Open Banking and Smart Cash Flow financial transactions. Products and services have been made available to customers for various processes, including e-document management (invoicing, storage, tracking, etc.), bookkeeping (account statement, stock tracking, barcode identification, credit card withdrawal, etc.), payment (instant withdrawal, payment link sending, invoice matching, etc.), and bank account transactions.

Growth driven by diversified initiatives

In 2023, the focus was on enhancing products and services to attract more SME and individual customers, boosting their engagement and base penetration. In this context, 34 new branches were opened, 33 of which were retail branches, in order to facilitate accessibility to the range of products and services offered by Ziraat Participation. As of the end of the year, the Bank’s total number of domestic branches reached 189 across 61 provinces, including 169 retail, 14 commercial, and 6 corporate branches.

In 2023, an additional new salary protocol has been signed between the Presidency of Religious Affairs and Ziraat Participation, covering 45,880 personnel working in 349 mufti offices. This collaboration has expanded the customer portfolio and strengthened customer relationships.

Ziraat Participation has become one of the financial stakeholders of the “My New Home with the New Housing Finance Model” campaign, which was launched on 16 January 2023 with the joint efforts of the Ministry of Environment, Urbanization, and Climate Change of the Republic of Türkiye and the Ministry of Treasury and Finance of the Republic of Türkiye and aims to enable citizens to purchase houses with affordable financing conditions.

In accordance with the cooperation agreement signed between Türkiye’nin Otomobili Girişim Grubu A.Ş. (TOGG) and Ziraat Participation, the TOGG Vehicle Finance product was made available to customers in order to meet the financing demands of real persons who would like to purchase the national automobile brand TOGG.

CORPORATE BANKING

CORPORATE BRANCH BANKING

Value proposition shaped by Customer-Oriented Service Approach

Ziraat Participation, which is on its way to becoming Turkey’s leading and pioneering participation bank, conducts its Corporate Branch Banking operations through 6 corporate branches across 3 provinces.

Ziraat Participation’s Customer-Oriented Service Approach ensures that all customer needs are addressed in accordance with the Business Culture Principles in the corporate banking sector.

In 2023, the “Vade-SİZ Export Credit” Package was implemented to facilitate easy access to financing for businesses that are members of exporters’ associations, with the objective of contributing to the economy of our country. 5 different companies received USD 15 million in financing within this context. Current average and export cost support were received from all companies in proportion to the amounts disbursed.

Customers who contribute to the country’s export revenue and possess high-tech production capabilities now have access to the subject product, and fulfilling the companies’ demands further improved customer satisfaction and loyalty.

On 6 November 2023, Ziraat Participation executed an international sukuk issuance worth USD 500 million, with a maturity date of 12 November 2026, providing Ziraat Participation to secure long-term resources amounting to USD 254 million. During the reporting period, Corporate Branch Banking provided its customers with 44% of relevant resources, totaling USD 221 million.

Resources from the Islamic Development Bank to SMEs and medium-sized enterprises

EUR 13 million of the second tranche of EUR 46 million for the use of SMEs and medium-sized (mid-cap) enterprises provided by Ziraat Participation from the Islamic Development Bank (IDB) under the guarantee of the Ministry of Treasury and Finance of the Republic of Türkiye, was made available to customers through Branch Banking.

Corporate Group Personal Accident Insurance was introduced to customers

On 17 October 2023, Corporate Branch Banking introduced the new Corporate Group Personal Accident Insurance, which was designed to augment Ziraat Participation’s insurance revenues. This product achieved a total premium production of TL 60 million in the last quarter of 2023. Although TL 30 million of this premium was generated by branches affiliated with Corporate Branch Banking, this new policy ranks as the insurance product with the highest commission share among the Bank’s insurance products, with a commission share of 70%.

In 2024…

In 2024, Ziraat Participation will enhance its marketing efforts to raise funds by offering innovative investment, treasury, and cash management products, in addition to its core banking activities. Furthermore, the Bank will continue to provide project and investment financing, financial leasing, import-export financing, and funding from IDB, KGF, and KFK to both the public and private sectors.

COMMERCIAL BRANCH BANKING

14 commercial branches across 9 provinces

Commercial Branch Banking serves corporate and commercial segment customers in provinces where there are commercial branches, as well as in provinces without corporate branches, within the framework of the mission of providing service to Ziraat Participation customers through the most appropriate channels and its customer-oriented banking approach.

Commercial Branch Banking began 2023 with a total size of TL 43.8 billion, consisting of TL 10.7 billion in funding and TL 33.1 billion in financing. By the end of 2023, it achieved a funding level of 131%, a financing level of 99%, and a working-size development of 107%.

A business portfolio managed with a proactive approach

In 2023, Ziraat Participation prioritized the management of marginal costs and focused on achieving growth as a net exporter in TL loans, investment financing, financial leasing-sale, leaseback products, and loans, in line with securities and growth-provision communiqués.

By closely monitoring the communiqués, the Bank conducted marketing efforts to get widespread and low-cost funds. The aim was to prevent an increase in the Bank’s funding costs and optimize the segment and corporate profit.

Commercial Branch Banking began 2023 with a total size of TL 43.8 billion, consisting of TL 10.7 billion in funding and TL 33.1 billion in financing. By the end of 2023, it achieved a funding level of 131%, a financing level of 99%, and a working-size development of 107%.

Katılım Finans Kefalet (KFK) Collaboration

As per the protocol signed between KFK (a credit guarantee fund) and Ziraat Participation, the TL 20 million limit allocated in the first tranche was made available by taking immediate action in order to ensure customers’ access to finance. In 2024, Ziraat Participation will continue its KFK guaranteed financing operations.

Diversified contribution with different financing packages and products

Ziraat Participation provides support to exporting companies that contribute to the country’s economy through exporters’ associations with its “Vade-SİZ Export Credit” product. During the reporting period, the Bank extended USD 18 million in loans to 15 different customers.

In order to address the adverse impacts of the COVID-19 pandemic, an Emergency Working Capital Loan to Support SMEs in Türkiye Islamic Development Bank (IDB) Sourced Financing product was issued by the management of the Islamic Development Bank (IDB) in favor of Ziraat Participation in return for the treasury guarantee of the Government of the Republic of Türkiye. EUR 9 million was disbursed to 11 SMEs and medium-sized enterprises through branches affiliated with Commercial Branch Banking.

Commercial Value Proposition Project

The Commercial Banking Value Proposition project was launched in November 2023, and meetings were conducted with our customers both in person and online until the end of 2023. The interviews resulted in the development of a total of 14 personas, including 7 new ones and 7 revised ones.

By completing our Commercial Banking Value Proposition project in the 1st quarter of 2024, we will maintain our position as the solution partner for our customers with our end-to-end holistic value propositions.

FOREIGN TRADE OPERATIONS

Ziraat Participation has integrated the latest data pattern updates implemented in SWIFT High Frequency Data Reporting in 2023.

Added value generated in 2023

Ziraat Participation has integrated the latest data pattern updates implemented in SWIFT High Frequency Data Reporting in 2023.

Within the scope of the ISO 20022 SWIFT Integration Project in International Payments, the necessary integration has been implemented to process the incoming MX messages by the system.

As part of the Bank’s strategic plan, the End-to-End Value Proposition Project, Foreign Trade Consultancy and Business Development Service Management system was established for the Outward-Exporter persona selected in the Entrepreneurial Banking Value Proposition Project, and various programs such as branch, customer visits and training programs were initiated.

End-to-end automation of the process between Foreign Trade Operations and Compliance units was implemented for foreign currency transfer transactions received by the Bank. Within the scope of the Organizational Process Improvements Project, the 1st Phase study of the import letter of credit process improvement was conducted.

Product Based Foreign Trade report screens were created.

A summary report on Foreign Trade transactions was prepared for year vs quarter comparison with product, branch, customer, filtering option.

2024 Targets

In 2024, the Foreign Trade Operations unit will focus on the following projects and studies:

• Systematic improvements required to conduct import transfer transactions through digital channels
• Systematic improvements required for Export Value Acceptance Certificate transactions through digital channels.
• Artificial intelligence-supported MX-compatible, user-friendly foreign exchange transfer screen operation
• Necessary work to ensure that outgoing MX messages are generated and sent by the system as required for the ISO 20022 SWIFT Integration in International Payments project.
• End-to-end automation of the process between the Foreign Trade Operations Department and the Compliance Department for foreign exchange outgoing money transfer transactions
• Registered Electronic Mail (KEP) integration of intermediary bank notifications sent to Ziraat Participation
• Organizational Process Improvements Project/Import Letter of Credit Process Automation, 2nd Phase Study will be carried out.

OPERATIONS CENTERS

Significant tasks undertaken regarding the earthquake

As part of the Business Continuity Emergency (İSAD) efforts, Ziraat Participation contributed to the mitigation of the adverse impacts caused by the Kahramanmaraş earthquakes, which were deemed the disaster of the century and had profound effect on 11 provinces. The Bank provided accommodation opportunities for its employees and their families by evacuating them to safe areas.

In order to reactivate the service points in the region, container branches were constructed and operationalized.

Fully equipped living container areas have been established to enable Bank employees in the earthquake-stricken region to reside in their respective provinces. As soon as the earthquake was reported, a coordination effort was promptly initiated to address all the needs of the employees and their families in the affected region.

The İSAD Coordination Office maintained consistent communication with the employees in the region, and the status of the branches was closely monitored. The relevant units were provided with guidance to implement the decisions made during the İSAD Committee meetings.

In 2023, new implementations were introduced to simplify the lives of consumers.

All real persons, including merchants, have been granted access to account opening transactions with digital document approval through the branch channel. Furthermore, when customers with foreign identification numbers acquire TR citizenship, the creation of duplicate customers is prevented.

2024 projects

Projects and studies that the Operations Centers unit will focus on in 2024;

• It will be ensured that legal person customer opening transactions will be conducted using digital document approval, the single partner/single authorized signature circular flow will begin and start at the branch, and mass customer opening transactions will also be conducted using digital document approval.
• Systemic integration is planned with Ziraat Bank Ankes Management in order to manage cash transfers and requests at branches more effectively. Within this framework, money group transactions will be conducted via the barcode application, systemic integration will be established between Ziraat Bank and Ziraat Participation, facilitating reconciliations through the system.
• It is planned to develop a cash limit suggestion structure to establish the daily cash limitations for Ziraat Participation branches.

PAYMENT SYSTEMS

Increased activity in payment systems

Ziraat Participation experienced significant growth in its card and member business volume in 2023, with an evident expansion in its member business network.

The number of POS terminals increased by 22%, and POS turnover grew by 2.5 times compared to the end of the previous year. The number of bank cards increased by 24%, and the debit card turnover grew by 54% compared to the end of the previous year. The number of credit cards increased by 52%, and credit card turnover grew by 3 times compared to the end of the previous year.

The TROY debit card has been issued and is now available to customers in order to encourage the widespread use of the domestic and national card scheme TROY in card payments.

In 2024, Ziraat Participation will persist in carrying out the following endeavors:

• In addition to the Mobile POS application, efforts are made to implement the Ziraat Participation Mobile POS Basic Sales Application, which can be extended to member businesses governed by the communiqués numbered 507 and 509 of the Tax Procedure Law,
• With the TR QR code infrastructure, payment flow is supported on cards and POS devices, and the project to expand it for POS devices,
• Activities regarding the implementation of the Commercial Credit Card product, which enables business owners to secure funding for their needs and conveniently monitor their expenditures.

INFORMATION SYSTEMS MANAGEMENT

Regarding Information Systems activities, numerous projects and studies were completed in 2023.

Highlights of the key works that are essential for the seamless operation of Ziraat Participation’s infrastructure and superstructure, as well as the excellence of its service delivery platform, are summarized below.

• With the instant market application in 2023, customers were provided the opportunity to carry out transactions and place orders based on real-time rates.
• The reports created throughout the credit risk monitoring process can now be automatically transferred to the system.
• With the LGD Modeling/Macroeconomic Model Update Project, the calculation of loss given default (LGD) began to be based on data from Ziraat Participation. 
• The improvements made to the Internet Banking module regarding the Direct Debiting System (DBS) have enabled companies and dealers to carry out transactions such as uploading, reporting, cancellation, and payment of invoices in a shorter time.
• With the 8-Digit Bank Identification Number (BIN) Support Project, card schemes were updated, and compliance with the requirements communicated by BKM was ensured.
• Within the framework of the Austria Card Chip Development Project, alignment was achieved with a new raw card supplier (Austria Card).
• With the Project of Integrating Correspondence Payment MX (K20) Message Type to the EFT System, compliance with the legal obligation set by the CBRT for end-to-end integration with SWIFT in TL payments has been ensured.
• With the TLREFK Indexed Leasing project, TLREFK indexed leasing financing started to be extended to customers.
• WAF (Web Application Firewall) security service has been commissioned for specified services.
• With the Open Banking - Account Transactions and Payment Order Initiation Project, additional services for displaying other bank account information and initiating payment orders were implemented. Thus, it is possible to control and perform transactions on all accounts using a single mobile application, a single password, and a single security verification.
• The Daily Valued Account (Cash Account) Project reduced the workload of the branches and head office sales teams and prevented customer dissatisfaction due to operational errors.
• With the Katılım Mobile and Internet Branch Document Request from Customers Project, branch personnel are enabled to request documents from customers digitally, and customers can submit their documents to the Bank digitally without the need to visit the branch.
• With the Calculation of Return and Cost Rates for Asset and Liability Items of the Balance Sheet Project, short- and long-term calculations of the Bank’s profitability as stock and marginal were ensured. Systematizing manual calculations has mitigated operational risk.
• With the Additional Developments of the Ziraat Audit Internal Control Application, customers under internal control detection can be identified on the “My Inter-Customer” and “My Participation Customer” screens, and enhancements have been made in the Head Office Control Reports.
• With the Project of Integrating the Findings of Branch Audits into Intervision and Creating Business Processes and IS Audit Screens, it was facilitated to identify customers with inspection findings on the “Inter-Customer” and “My Participation Customer” screens, and enhancements have been made in the report outputs.
• The Ocean 2.0 transition has been completed via the Ocean Integration Project.
• With the New TR Identity Verification and Self Service Transactions Project, customers have been enabled to update their mobile phone numbers and unblock their SIM cards by using security control and biometric methods on their new ID cards.
• With the Branch Guide Screen Arrangements Project, cards were developed for 16 monitors that branches frequently use. By means of these cards, portfolios can more effectively manage customers and create collections eliminating the need to navigate to a secondary interface.
• With the Katılım Mobile Device Activation Structure Renewal Project, activation has been enabled through devices whose security has been confirmed by verifying the phone number from the device/operator or alternatively by matching with IVN/IVR call.
• With the Central Voice and IVR Project, branch telephone lines were centralized, and an IVR system was established.
• The TOGG and E-Commerce Financing Project enabled customers to submit their TOGG Financing applications via the mobile channel.
• With the TARSİM System Integration Project, the systemic integration for issuing TARSİM policies to the Bank’s customers has been completed, and policy production has commenced.
• The 2023 Ziraat Participation Bank Disaster Center User Tests were successfully conducted.
• In order to prevent the disruption of the services of Ziraat Participation branches, which were damaged in the disasters of 6 February 2023, infrastructure installation works were conducted. In this context, the implementation of mobile branches and containers operating on 4.5G lines was completed, and support was provided for critical services that were urgently required in the earthquake region.
• The software application support service reviewed a total of 15,625 incident records throughout the year and finalized 5,845 user authorization requests.

Ziraat Participation experienced an 80% growth in its asset size in 2023. The increase in loans provided to the real sector, particularly the manufacturing and industrial sectors, as well as the loans granted to the earthquake region, mostly contributed to this growth.

TREASURY MANAGEMENT AND INTERNATIONAL BANKING

Ziraat Participation experienced an 80% growth in its asset size in 2023. The increase in loans provided to the real sector, particularly the manufacturing and industrial sectors, as well as the loans granted to the earthquake region, mostly contributed to this growth.

By efficiently utilizing both domestic and international funds, priority has been given to sectors that hold strategic significance for the Turkish economy and have the potential to generate added value.

In asset-liability management, Ziraat Participation went to resource diversification participation funds being the main source; established the liability side of the balance sheet observing optimal cost and maturity and adopted a strategy of most efficient management of the pools from participation funds. In this context, the Bank expanded its resource opportunities in Turkish lira and foreign currency from domestic and international banks in 2023.

Ziraat Participation has been the first public participation bank to issue international sukuk in Turkey. 

Ziraat Participation, which has been the first public participation bank to issue international sukuk in Turkey, has made the first private sector issuance in the Reg S format since September 2021, excluding the Ministry of Treasury and Finance issuances.

The transaction, which was described as “a strong first issue for Ziraat Participation” and garnered significant interest from 135 investors across 24 different countries, was oversubscribed by more than 5 times.

The intense demand for the USD 500 million Ziraat Participation issuance constituted a significant step for the ongoing development of the Sukuk market in Turkey, and the transaction marked the largest demand rate for issuances in Turkey in 2023.

Ziraat Participation’s share in the participation banking sector increased from 17.9% at the end of 2022 to 18.8% at the end of 2023. The Bank aims to increase its share in the sector in 2024.

Ziraat Participation has successfully achieved its target results in terms of pricing, transaction size, and investor diversity through the Sukuk issuance.

Ziraat Participation ensured resource diversity and bolstered its funding structure in 2023, just as it did in 2022. This was achieved by securing SME support loans from international markets through the Islamic Development Bank and capital-like resources from domestic sources.

The Bank has achieved the ratios set within the scope of the macroprudential measures implemented by the regulatory authority in 2023 in the most effective way through developing proactive solutions and taking the necessary actions.

The Bank’s sukuk portfolio was managed efficiently in 2023, contributing greatly to the increase in profitability. The purchase of CPI-indexed lease certificates, made in anticipation of inflation, accounted for the majority of the profit in securities dividend income.

Instant Market, where customers can carry out foreign exchange transactions, is the first and only foreign exchange trading module among public participation banks and was successfully implemented in 2023.

Ziraat Participation achieved a great contribution to increase its profitability figures by effectively managing its sukuk portfolio. Considering the inflation increase, CPI indexed lease certificates obtained made up a large percentage of increase in securities profit share amount.

In 2022, Ziraat Participation Bank held a 17.9% share in the participation banking sector, which increased to 18.8% by the end of 2023. The Bank is committed to increase its share in the sector in 2024.

Ziraat Participation’s solutions, creating value in the international banking sector in 2023

Ziraat Participation ensured resource diversity and bolstered its funding structure in 2023, just as it did in 2022. This was achieved by securing SME support loans from international markets through the Islamic Development Bank and capital-like resources from domestic sources.

In 2023, Ziraat Participation completed the regulatory compliance process with a substantial number of banks, established SWIFT correspondent relationships, and improved its capacity to meet the demands of foreign trade with greater speed and efficiency.

With its extensive network of 46 correspondent accounts in 20 different currencies, Ziraat Participation has signed mutual wakala/murabaha agreements with numerous banks. As part of these agreements, interbank murabaha and wakala transactions were conducted, and resources contributing to funding diversity were provided.

HUMAN RESOURCES

In line with its targets of sustainable development and growth, Ziraat Participation continued to provide effective services to its customers, with 2,430 employees and 189 local branches in 61 provinces and 2 branches abroad as of the end of 2023.

2023 Activities

In line with its targets of sustainable development and growth, Ziraat Participation continued to provide effective services to its customers, with 2,430 employees and 189 local branches in 61 provinces and 2 branches abroad as of the end of 2023.

Ziraat Participation continued to support employment by recruiting 674 people in 2023. During the year, 398 candidates were employed after a process of written test and interviews and the Bank supported employment of young and new graduates.

The Bank strives to represent our country by opening branches abroad, while also spreading and developing the interest-free financial system within our country’s borders through branching activities. In this regard, it launched 34 new branches throughout the country and 1 new branch in Somalia in 2023.

Having adopted the principle of offering equal opportunities to its employees, Ziraat Participation has prioritized raising the managers of the future from its in-house human resources. Accordingly, those who completed the Manager Candidate Program successfully were promoted to managerial positions in 2023 as well.

By using the performance management system effectively, job position promotions continued in 2023.

Ziraat Participation knows that human resources is has the greatest stake in achieving sustainable growth and effective performance and accordingly, the Bank conducts promotion exams every year for its employees to move forward in their careers in a fair environment. In this context, the Bank continued its collaboration with İstanbul Sabahattin Zaim University in 2023 and held an online professional-title promotion examination. Employees that were successful in the exam were promoted to a higher position.

Activities and operations within the scope of Occupational Health and Safety continued in 2023. Ziraat Participation monitors and manages its employees’ occupational developments in a planned way. In this context, classroom, online and video trainings were designed and average of 37.2 hours/man trainings were delivered in 2023.

Employees who were hired through a recruitment exam, Participation Banking School was organized with the collaboration with İstanbul Sabahattin Zaim University to get them prepared for their jobs through face-to-face trainings.

The Corporate Culture Development Project was implemented and training was provided to management groups.

Considering the circumstances of today when international communication is inevitable and its importance increases every day, support for training was provided for employees to learn English and Arabic languages with the objective of increasing the quality of foreign language of its human resources.

Within the context of “Ziraat Participation is Reading Books Project” a total of 3,435 books were sent to 1,010 project members.

With a proper and fair remuneration policy, Ziraat Participation not only increases employee motivation and their corporate loyalty, but also encourages sustainable success which complies with corporate strategy. Salary research is performed by collecting salary data from the sector and observing the internal balance within the Bank, at the same time sustaining its competitive position.

Remuneration structure includes the salary which is based on job position and employees’ seniority as well as job place and transportation benefits, performance premium and insurance premium, which are variable, and other fringe benefits. Furthermore, there are individual pension system with company contribution, life insurance, foreign language compensation, nursery fee, maternity benefit, family support benefits (family success, special education support, etc.).